This is the part that blows minds. Not because it's complicated — because it's simple. So simple that once you see it, you can't unsee it. And it changes everything about how you view debt.
When you sign a promissory note for a loan, you're not borrowing pre-existing money. Your signature creates the money. The bank converts your promise into spendable currency — then claims you owe them for your own creation.
"Commercial banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan... it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created." — Bank of England, "Money Creation in the Modern Economy" (2014)
This isn't conspiracy theory. It's documented in Federal Reserve publications, banking textbooks, and federal statutes. It's hiding in plain sight.
Your Journey Through the Trick
The basic mechanism. What you think happens when you get a loan vs. what actually happens. This is the foundation.
Your promissory note is the same legal instrument as a Federal Reserve Note. Same category. Same power. Different packaging.
If the bank didn't lend you pre-existing money, what did they give you? The legal vulnerability at the heart of modern banking.
Why This Matters for Your Agreements
This isn't abstract economics. It directly affects the agreements you're in:
If your signature created the $300,000, why do you "owe" it? You gave them a $300,000 instrument. They gave you... access to it.
Each swipe creates new money through your promise. You're not "using their credit" — you're creating credit through your signature.
Same principle, smaller scale. Your promissory note funds the loan. The dealership gets paid from your creation.
Your future labor, monetized before you even begin working. Your promise becomes their asset immediately.
Story: "The bank has money, they lend it to you, you pay it back with interest."
Reality: "You create a promise, the bank monetizes it, then claims you owe them for your own creation — plus interest."
The Consideration Question
Valid contracts require consideration from both parties. You provide your promise (real consideration). But what does the bank provide?
If the bank simply converts YOUR promise into spendable form, where is THEIR consideration? What did they actually give up to create a binding contract?
This question has been raised in courts, largely unsuccessfully — but understanding it gives you a completely different lens on what "debt" actually is.
Start the Journey
Take these pages in order. Each builds on the last:
- How Money Is Created — The basic mechanism everyone needs to understand
- Promissory Notes as Payment — Why your signature has the power it does
- The Consideration Paradox — The legal implications and what actually works